LionRock Capital has completed its deal to take a majority stake in the struggling British shoe maker Clarks and confirmed senior management changes, with Victor Herrero replacing Giorgio Presca as CEO after weeks of speculation.

The departures of the chief commercial officer, Massimo Barzaghi, and of the head of human resources, Difna Blamey, were also confirmed.

Herrero was a non-executive director on Clarks’ board since 2019. Previously, he was the chief executive of the American clothing brand Guess from 2015 to 2019 and head of Asia Pacific for the Spanish group Inditex for 12 years. He is also chairman of Hong Kong-based apparel brand owner and retailer Bossini and a non-executive director of Viva China Holdings.

In its statement, LionRock said that Presca had gone to “pursue other activities”. He had joined Clarks two years ago to turn the around company’s waning fortunes. The former CEO did not respond to a request for comment from Shoe Intelligence.

LionRock Capital, a Hong Kong-based private equity firm, has acted on behalf of the group of Olympic gymnast-turned-retail billionaire Li Ning. 

Li runs Viva China Holdings, which is paying £51 million (€57.5m-$69.7m) for 51 percent of LionRock Partners QiLe Limited, a company wholly-owned by LionRock Capital created to carry out an acquisition, according to a filing with the Hong Kong stock exchange released in January. The company, known as a special purpose vehicle (SVP), is investing £100 million (€116.4m-$138m) for a 51 percent stake in Clarks.

The price tag to buy the stake in the SVP will be offset against £54 million (€61m-$73.7m) Viva China lent to LionRock in September 2020 to finance an acquisition, according to the filing.

“We are extremely pleased to formalize our partnership with Clarks. Clarks is one of the world’s most recognized consumer names and we look forward to working with the Clark family and Clarks’ leadership team to build on its tradition of providing customers around the world with top quality products and exceptional service,” said LionRock founder and managing director Daniel Tseung.

In November, Clarks struck a deal with landlords to switch to turnover rents, where lease payments are linked to sales as part of a company voluntary arrangement, a restructuring vehicle being used increasingly by high street retailers struggling amid the Covid-19 pandemic.

In its latest set of accounts for the year to Feb. 1, 2020, Clarks revealed it was loss-making before the pandemic broke out last year, posting an 8 percent decline in sales to £725.3 million (€827.9m-$1.0bn) as it sold fewer shoes due to continued difficult conditions in retailing in the U.K. and Northern Ireland.

The operating loss was cut to £14.1 million (€16.1m-$19.5m) from £48.7 million (€55.6m-$67.4m) while the net loss slipped to £15.0 million (€17.1m-$20.8m) from £20.9 million (€23.9m-$28.9m).

Clarks said the pandemic had a “deep and immediate” impact on its performance. It added that Brexit will also have an impact “on profitability and cashflow over the foreseeable future and brings risk and uncertainty in a number of areas.”